Training, Technical Assistance, Monitoring and A-133 Audits

A-133 Audit Requirements

In 1984 the Single Audit Act was enacted. This was to improve audit coverage of federal monies

In 1997 OMB issued revised Circular A-133, Audits of States, Local Governments and Non-Profit Organizations

Sets uniform standards for the audit of States, local governments, and non-profit organizations expending Federal awards

A-133 Audit Requirements

Requires audit of “non-Federal entities” expending more than $500,000 of Federal awards in a single year

If expenditures are all in one Federal program, may be “program-specific” audit

Otherwise, must be entity-wide Single Audit

Who performs the county Single Audit? Auditor of State (AOS), or

Independent Public Accountant (IPA) May be at county request or at AOS initiative

AOS must approve scope of audit and perform quality assurance review

What is the scope of an A-133 audit?

Review 14 compliance requirements which cover all concepts of the program

Review 50% of federal dollars/25% if low-risk auditee (but must cover all Type A high-risk programs)

Report questioned costs over $10,000 (actual or projected), material non-compliance and material internal control citations

“Major Program” Concept

Risk-based approach used to determine “major programs” to be audited

Requires identification of “Type A” and Type B” federal programs from Schedule of Federal Awards Expended

Six basic steps to identify programs to be tested: Identify Type A programs Determine “high risk” Type A programs

“Major Program” Concept

Identify Type B programs Select “high risk” Type B programs Replace “low risk” Type A programs with

“high risk” Type B programs Apply “percentage of coverage” rule at 50%

or 25%, as applicable

“Major Program” Concept

Total Expenditures from

Federal Schedule

Type A Programs

$500,000 to $10 million Greater than $300,000

$10 million to $100 million Greater than 3% of Federal Schedule

$100 million to $1 billion Greater than $3 million

“Major Program” Concept

Before County Family Services

Agencies

With County Family Services

Agencies

Federal Expenditures

$4,804,402 $18,943,714

Type A

Type B

“Major Program” Concept

Before County Agencies

With County Agencies

Federal Expenditures

$4,804,402 $18,943,714

Type A $300,000 $568,311

Type B $87,000 $87,000

Example – 2006 – As ReportedFederal Program CFDA Amount Type

Medicaid 93.778 $1,349,971 A - high

CDBG 14.228 1,081,098 A – high

WIA 17.258 862,268 A - low

Highway Planning 20.205 321,552 A - low

Homeland Security 97.067 226,883 B - high

Home Investment Partnership 14.239 216,318 B – low

Byrne Justice Assistance 16.738 152,457 B - low

17 Other Programs < 100k 593,855

Total Federal Awards $4,804,402

Example – 2006 – With County Agency Monies Included

Federal Program CFDA Amount TypeMedicaid 93.778 $3,717,224 A - high

TANF 93.558 3,665,351 A - high

Child Support (Title IV-D) 93.563 1,840,820 A - high

Foster Care (Title IV-E) 93.658 1,675,325 A - high

SSBG (Title XX) 93.667 1,145,455 A - high

CDBG 14.228 1,081,098 A - high

Child Care 93.575 929,237 A - high

SNAP 10.551 862,416 A - high

WIA 17.258 862,268 A - low

28 Other Programs <568k 3,164,520

Total Federal Awards $18,943,714

Hours and Cost

Factors that influence audit hours and cost: 14 Administrative Requirements

Applicable per AOS: Activities Allowed, Cash Management, Period of Availability, Reporting

May be Applicable per AOS: Allowable Costs, Eligibility, Equipment and Real Property, Matching, Procurement, Subrecipient Monitoring, Special Tests and Provisions

May not be Applicable per AOS: Davis-Bacon Act, Program Income, Real Property Acquisition/Relocation Assistance

Hours and Cost

Number of Case Files or Transactions Centralized Testing (RMS, Indirect Cost

Programs) Condition of Records Retrieval Time of Records

Cost

Cost of a Single Audit is an allowable reimbursable cost

County will be charged by AOS for time auditing county agencies

Proportion of cost will be allocated to each county department

A-133 Audit Report Components

An opinion on the financial statements A report on the county’s internal controls –

reportable conditions and material weaknesses

Information on a county’s compliance with program requirements along with findings and questioned costs

Could include a corrective action plan when there is an audit finding

The Auditor’s Assessment of Internal Control and Compliance Testing The Auditor will:

Identify your processes for administering “major” programs

Identify “key” internal controls Test key controls

Are the controls properly designed? Have the controls been placed in operation? Are the controls functioning as designed?

The Auditor’s Assessment of Internal Control and Compliance Testing The results of the Auditor’s tests of internal

control are used to assess control risk If control risk is low, the Auditor may reduce the

extent of testing If control risk is medium or high, the Auditor may

keep the extent of testing the same or increase the extent of testing

The Auditor’s Assessment of Internal Control and Compliance Testing How can you encourage the Auditor to

reduce the extent of testing? Document your processes and the related internal

controls Maintain good documentation of your activities

Establish and maintain an effective records retention process

Document reviews of records, checks, authorizations and supervisory reviews

Establish policies and procedures with reasonable flexibility

Common Issues

Missing case files Failure to monitor subrecipients Missing documentation in case files Improper claiming of building costs Non-compliance with procurement

requirements/failure to document

Common Issues

Improper claiming of equipment costs Improper charges in cost pools RMS issues Interfund transfers charged as costs

A-133 Audit Resolution

Within six months of receiving a copy of the county’s Single Audit, ODJFS must: Issue a management decision on whether it

sustains the audit finding(s) affecting their grant awards

The reason for its decision The corrective action the county must take along

with time frames

Initiatives to Prepare for County A-133 Single Audits Federal Grants Management Monitoring

Reviews, Technical Assistance and Training Plan New consulting-based monitoring reviews Technical assistance, including consulting

services Expanded training programs

Core Principles

Purpose is comprehensive and integrated model of technical assistance, training and monitoring, based upon eight core principles: Solution Oriented State and County Collaboration County to County Collaboration Differentiated Services

Core Principles, cont’d

Risk-Based Approach Integrated Technical Assistance, Training and

Monitoring Leveraging Resources Maximizing Use of Technology

Key Definitions

Technical Assistance – needs-based, focused and solution-oriented provision of technical knowledge, guidance and information to meet federal and state expectations Fiscal Services – financial accounting and

reporting issues Program Offices – program design and policy

development ORAA – process design and enhancement

Key Definitions, cont’d Training – broad-based, planned, structured

educational programs to communicate federal and state expectations, and methods to effectively and efficiently meet these expectations and improve performance

Division of responsibility by Fiscal Services, Program Offices, and ORAA would track that for technical assistance, noted above

Key Definitions, cont’d

Monitoring – risk-based reviews of county family services agencies administrative practices to gauge performance, provide information for improvement and identification of best practices, and identify training needs and provide technical assistance specific to the agency in question

Relationship of Training, Technical Assistance and Monitoring Training tells you what you need to know and

do to have successful federal grants management

Technical Assistance tells you how to do it Monitoring measures how well you do it and

identifies impediments to success

County Agency Needs

Support in navigating initial A-133 Single Audits

Guidance on existing known county issues County-specific consulting assistance on

request Assessment of the effectiveness of training

and technical assistance

Value-Added Services

It is challenging and necessary to provide value-added technical assistance, training and monitoring which benefits county agencies

Necessary characteristics include: Meet county agency needs for support and

guidance Assist county agencies in improving efficiency and

effectiveness of local operations

Value-Added Services, cont’d

Proactively assist counties in eliminating or reducing exposure to AOS A-133 Single Audit findings

Meet federal requirements for provision of technical assistance, training and monitoring

Eliminate ODJFS exposure to AOS A-133 Single Audit findings for inadequate county agency monitoring

Methods of Providing Technical Assistance Should vary by:

Size Available resources Preferences

Specific methods: Consulting services Technical and practice aids

Training Methods

Regional meetings on defined topics

Presentation at association conferences

Video training

Monitoring

Objectives:

Meet federal requirements

Promote good management in county agencies

Provide positive benefit to county agencies

Monitoring, cont’d

Components Guided Self-Assessments Risk Assessment On-Site Monitoring Reviews Technical Assistance Reports On-going Technical Assistance On-going Training

Implementation

Communicate plan to major associations OJFSDA OCDA PCSAO

Identify pilot counties Develop Guided Self Assessment Develop Monitoring Assessment Tool Develop Technical Assistance Report

Implementation, cont’d

Conduct initial assessments and reviews – underway

Issue initial Technical Assistance Reports - underway

Develop critical technical assistance materials - underway

Plan and develop critical training activities - underway

Conclusion

The state cannot do it all The state cannot achieve success by merely

passing responsibilities to the counties The state and counties can only succeed by

recognizing their shared responsibilities, within federal constraints, for administration of our federal programs

Questions and Comments?